Summaries of health policy coverage from major news organizations

PACIFICARE: INKS MULTI-YEAR DEAL WITH SUTTER HEALTH

Two of California's largest health care providers have entered into a $450 million contract, San Francisco Business Times reports. The second largest HMO in the state, PacifiCare of California, has agreed to cover all 26 hospitals and almost all of the doctor and specialty groups owned by Sutter Health, one of the state's largest hospital systems (Rauber, 10/20 issue). Under the "global contract," PacifiCare "will pay Sutter about $150 per year to take care of approximately 115,000 members in Northern California," Sacramento Business Journal reports. "The master contract offers multiple 'capitation' payment rates, depending on the region," according to Sutter spokesperson Bill Gleeson. The deal is "[b]elieved to be the first of its kind in the state." For Sutter, it offers "new stability" and for PacifiCare, it gives "both cost savings and expanded coverage for its members." EVERYONE WINS Bruce Gorman, a local health care consultant, said, "Sutter is quickly becoming the Northern California player, competing with Catholic Healthcare West and the rest. You've got to admire Sutter for doing something that others are just talking about." According to Rick Badger, PacifiCare's general manager for Northern California, the "master contract will offer administrative simplicity instead of 30-odd separate deals with different entities." He said, "It puts to bed the financial terms for at least three years and opens the door to discuss improved service to our members." Sutter spokesperson Bill Gleeson said, "Everyone benefits from having a systemwide provider that is committed to a stable multiyear contract" (Robertson, 10/20 issue). SAN FRAN OUT Some San Francisco residents may be not be affected by the deal. The San Francisco Business Times reports that "20,000 members of PacifiCare's Medicare HMO aren't covered by the agreement" and neither is "the powerful 1,250-doctor Brown & Toland Medical Group in San Francisco" (10/20 issue). Sacremento Business Journal reports that California Pacific Medical Center, also located in San Francisco, has been left out of the deal as well. Gleeson said this is "due to legalities associated with existing PacifiCare contracts" (10/20 issue).

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